Marijuana News Today: CBD Market Could See Huge Growth for Investors
Marijuana News Today
In the marijuana news today we’re once again faced with a simple but often overlooked fact: cannabidiol (CBD) is quickly becoming a massive industry and a huge opportunity for investors.
While it’s no secret that the marijuana sector has an upward potential of hundreds of billion of dollars once it becomes globally legalized, that future is still a long way away.
The U.S. and many European countries are likely the next major markets to begin legalizing marijuana, but that could take years.
What we have in the meantime, however, is much better than a consolation prize: the CBD market is booming and it has the potential to grow far faster than the overall marijuana business.
Researchers estimate that the market for CBD in the U.S. could reach almost $24.0 billion by 2023. And those numbers only grow when you look at Canada, where the market for legal cannabis could climb to $4.7 billion by that time. (Source: “Booming Demand for CBD Is Making Hemp the Cannabis Cash Crop,” Bloomberg Businessweek, July 18, 2019.)
There’s even a chance that annual sales of CBD could become larger than those of other types of marijuana because of the large number of products in which CBD can be used.
And that’s what we need to focus on, the ease with which CBD can spread.
After all, CBD doesn’t necessarily (depending the composition of the product it’s in) cause a user to get high. As a result, this extract from the cannabis plant can be used in all manner of products without having to be considered a controlled substance.
That’s exactly what happened in the U.S., which legalized CBD with the passing of an agricultural bill that allowed hemp to be cultivated.
The U.S. CBD market has since exploded. And remember, America has yet to pass—or even seriously consider—new federal legislation concerning marijuana. So while I am near certain that marijuana will be federally legalized in the U.S. in the coming years, the fact of the matter is that this could be a long wait.
But for marijuana investors interested in getting in on this exciting segment of the global market right now, the U.S. CBD market provides an avenue to access U.S. consumers.
Many Canadian marijuana companies have also looked to the south, promising to expand their businesses into the U.S. and tap into the CBD market. I’ve long written that the first companies to successfully do this will see huge stock gains.
Marijuana stocks in general are going to benefit from the U.S. CBD market as it continues to grow, even more so when they directly access it.
Another major headline in the marijuana news today is the blockbuster deal that the largest U.S. marijuana stock, Curaleaf Holdings Inc (OTCMKTS:CURLF, CNSX:CURA), just struck.
Curaleaf just bought the privately held Grassroots for $875.0 million in a cash-and-stock deal. (Source: “Cannabis Canada: How a U.S. company suddenly became the biggest pot firm in the world,” BNN Bloomberg, July 17, 2019.)
This may very well propel Curaleaf Holdings to the top of the marijuana business size-wise as it spreads across a massive portion of the United States.
Following the acquisition, Curaleaf Holdings will be in 19 U.S. states and grow the number of its national dispensaries to 68 nationwide. It will also increase the company’s pro-forma 2019 revenue to $256.0 million. This comes on the heels of the company’s announced intentions to look into the European market in the near future.
The market reaction to the deal was very strong, with CURLF stock up three percent in early-morning trading today. The stock has also skyrocketed over the past five days, up 22%.
Curaleaf stock is now in a very enviable position; it’s among the largest marijuana companies in the U.S. and is continuing to expand. It’s also one of the few publicly traded pot companies that has access to huge swaths of the U.S. marijuana market.
As such, CURLF stock has the potential to be one of the best performers as legalization continues to spread.
On top of that, there are still events in the company’s future that could help spur growth, like a move to the Nasdaq or New York Stock Exchange. This company is poised for success down the line, and I’m very bullish on Curaleaf stock.
Another strong performer as of late has been Tilray Inc (NASDAQ:TLRY). While the company has no blockbuster deal to speak of, TLRY stock has still performed admirably in this rather difficult time for the pot industry.
Tilray stock fell about a point this morning, and it finds itself down nearly five percent over the past five days. Still, compared to many other marijuana stocks, that’s not too bad of a performance over that time.
What’s more impressive about TLRY stock is that it seems to have officially stemmed the bleeding that began when it first went public.
The stock shot up hundreds of percentage points in the early aftermath of its initial public offering (IPO). Since then, it has been playing catch-up, dropping until it balanced out to what the market truly valued it at.
Coming up on a year since its IPO, we’re now seeing Tilray stock begin to settle. After all, 150% growth from a company’s IPO price after one year, while very strong, isn’t absurd the way the 700% and 800% gains were immediately following the company’s IPO.
With that in mind, it appears that TLRY stock has stabilized. Better yet, it has done so above the $40.00 mark. My fear was that the stock’s fall would take it to the mid-$30.00 range, but that appears to have been overly pessimistic.
For investors interested in getting back in on Tilray stock, now could be a solid time to do so, while the stock is still trading at a discount but there’s far less risk of a continued regression.
CURLF and TLRY Stock Performances
The performances of CURLF stock (black line) and TLRY stock (blue line) over the past week are seen on the chart below:
Chart courtesy of StockCharts.com
The marijuana news today is fairly strong all around.
While the pot stock market could be doing better, the future seems bright as the U.S. CBD market looks to become a multi-billion-dollar powerhouse in a few short years.
Meanwhile, CURLF stock is dominating the news with its massive acquisition and its continuing conquest of the U.S. marijuana market, making it one of the more exciting pot stocks to watch right now.